Benjamin Franklin proved that electricity and lightening are the same thing using a kite, silk, and a string in the 1750s. He invented the lightning rod so that lightning bolts would hit the rod and not the house - and burn it down. In the years since then electricity has been produced and distributed under controlled circumstances to many regions.Image courtesy of noaa.gov

Does electricity have a social life? We learn in science class that electricity is a physical property that we ascribe to the movement or potential of subatomic particles. We call electrons that flow through wires and other conductive materials an electric current. For most of us we think about electricity for what it does – enables us to light our homes, run big turbines and televisions or in other ways performs useful work.

Can electricity be understood in social as well as physical terms?

I’d like to suggest that it can and I’m going to use the Systems of Exchange typology to make this argument.

The Systems of Exchange typology describes exchange behaviors as motivated by different forms of social relations and different ways of being rational. People can treat everyone the same (universalistic) or some people differently (particularistic), such as friends and family. People may be rational in two fundamentally different ways. They can be instrumentally rational and evaluate the economic efficiency of their choices (e.g. getting the best price), or they can be substantively rational and evaluate choices based on how well it helps to achieve or reflect a value (e.g. which is most fair, or honorable).

The four types that flow from these dimensions are represented as logical systems that are qualitatively different. They are social worlds that orient decisions an action in predictable ways. A price system approximates an auction market, and a communal system would describe a family business where family values and relations make a difference in how the firm works. The SOE website has many cases that illustrate these differences.

Systems of Exchange

THE SYSTEMS OF EXCHANGE TYPOLOGY is described further at http://systemsofexchange.org

Let’s see what happens when we treat electricity as a resource that can be subject to social processes and meanings.

Although electricity is very much a physical phenomenon it is also a social phenomenon in a number of ways. In this instance we can intuit that electrical resources have very different meanings depending who and where you are located socially.

Electricity can have multiple social meanings and be allocated according to very different principles depending on how meanings are applied to it.

In a price system, such as large regional markets that balance electrical loads over multiple utilities price plays a large role. Enron, the now discredited and bankrupt energy company, manipulated the electricity market seeking an advantage. Until reforms caused by the collapse of the large Pacific Gas and Electricity Company due to this market manipulation, price and demand played huge roles in allocation. The growth of community solar aggregation is an example of people coming together to collectively establish a solar electricity resource. They find gains and efficiency by bundling their demand and having greater buying power and lower maintenance costs for solar panels.

The use of lifeline rates by utilities to provide humanitarian energy assistance to low income customers is an example of how values can shape what is considered an inviolable right to heating, cooling and other electrical services. During the Great Recession some utilities extended lifeline rates to as many as 30% of their customers.

How can this analysis be useful? First it helps us to recognize the social in apparently natural phenomena. People have different ways of interpreting the fundamental nature of what are basically electrons. The way they are packaged and distributed and priced is shaped by social beliefs and institutions.

Secondly, if we recognize these differences we can fashion better energy policies that take into account the public’s understandings. Price may be an important allocation principle, but it is not the only one.